DA: 03:02
Hey Andrew. Thank you so much for joining me today on the SaaS breakthrough podcast. Really excited to have you here. Really excited to have Teachable here, a company that me and my co founder really look up to. We love your company, but for those of you, for those of the listeners I should say, who aren't as knowledgeable about Teachable as we are, why don't you give us a little bit about what you guys do, when it was founded, who the customers are and what'd you guys are doing uniquely in the marketplace?
AG: 03:29
Yeah, for sure. I mean, first of all, David, I should say I'm excited to be, to be chatting with you. Big Fans of Demio over a year, as you know, we've been going back and forth a lot the last few days, by the way we just decided a couple of hours ago that we're actually going to be testing out an automated webinar funnel using Demio. So, but yeah, as far as, as far as what Teachable does, what we do is we make it really, really easy for people to create and sell online courses and to make money from their expertise.
DA: 04:01
Easy, simple. What do you guys think that makes you guys different in the marketplace? I know there's other online membership platforms. How do you guys differentiate yourselves?
AG: 04:09
Yeah, I mean, you know, we're one of the, they are like probably 5,000 different online course platforms, but the, the real approach that we're taking is that we're differentiating by one, we want to help our instructors make more money just by virtue of using Teachable and there are a few different product paths that we have coming out in the next year, two years, three years, and that's the longer term vision. We can talk about that later if you, if you want, but what we're really known for is being really easy to use where like the simple version, the user friendly version, even if you're just getting started with courses, you'll still typically use us.
DA: 04:52
That's fantastic. That's exactly kind of our own motto here at Demio. We want to be that easy to use simple platform to take away a lot of the complexity of the technical headache. When was the company actually founded? Just, just so I know as far as like the timetable.
AG: 05:06
So it was founded back in 2014 by Ankur Nagpal so man guess like four and a half years in now.
DA: 05:16
Wow. And when did you join and what was the company like at that time when you joined up maybe the company size or ARR?
AG: 05:22
Yeah, so I joined back about three and a half years ago. It was six or seven people at the time. We were doing $10,000 a month or so in revenue. I think there were about 200 paying customers at the time.
DA: 05:40
Wow. So really early on still net process, maybe about six months in since it was founded getting some initial traction. What was that initial pain point?Looking, coming in, you're just saying, hey, we now need to grow this thing.
AG: 05:53
Yeah, so I mean the reality is at that time I was just trying to get a job. I reached out to Ankur and I sent him a bunch of ideas on like, hey, here's all these different things you can do, you know, to grow and acquire customers and all that. Came in, didn't really know what the pain points were, but we, I mean every early stage company needs to acquire customers at that point. The number one priority was like how can we figure out what is the repeatable predictable way that we're going to acquire customers? And so like for most SaaS companies, everybody tries a bunch of different things early on and you have like all these different tests and experiments, we're going to do this, this and this, but, and if you look at all of the really successful software companies that start early on, most of the time, the ones that actually grow really quickly, they find like one or two really good ways of acquiring customers and then they just do that over and over and over again. And so that was really the first thing that I worked on was trying to figure out like what is that one repeatable channel that we're just gonna like push really hard.
DA: 07:05
So I love that advice. I think that's absolutely so true. That focus, that ability to dial in on that. My question is, how do you find that? How did you decide what that thing was?
AG: 07:15
So we had, we had a situation, I think where the company was like a nail and I was like a hammer, like I had a lot of webinar experience and like that was the thing that I knew and I didn't know that much else beyond that and at the time Teachable had a bunch of leads but it was actually (inaudible)at the time and we weren't really great at converting those leads into paying customers. And so that was a pretty big pain point for us. And so we're like, look, what could we do to convert these customers? One thing that's really hard about online courses is that takes a lot of work to make them, you've got to get like 20 things, right. You have to choose a topic and create your course and marketing. set the software and all of that. And that takes a lot of education. So what we wanted to do is figure out how can we educate people and convert them at the same time and webinars where like the channel to do that.
DA: 08:13
100 percent. That's an exact perfect usecase for, for webinars. Did you guys also look at the offering and feel like you had to bundle in an educational course or something more for the users besides just software so they could get through, retention and usage of the software itself?
AG: 08:31
Yeah, for sure. I mean that was the biggest, that was one of the biggest strategies we used was everybody's like, okay, great, I have my, I have my software and the technology and all that, but I still need to know how to actually choose my topic and all that. So we created courses, we offer those courses. We often partnered with a really great course creators who already taught a lot of those topics and then we bundled those in.
DA: 08:56
That's a great idea. So you guys almost went strategic partnership area, finding experts that had the content already and you brought the software to the table?
AG: 09:03
Exactly.
DA: 09:05
No, that's fantastic. So you guys really early on really pushed through growth, just using that webinar strategy. Was that like the primary focus for the first few years?
AG: 09:15
So we've had a few. So our three biggest channels, let's say are organic word of mouth is our number one, number two is we use webinars both with partners and to the leads that come in. We also do a lot of influencer marketing and we do summits and the way we have thought about every month, and we've done this since the very, very beginning and it's been really really useful for us, is every month we start and we know we have a growth percentage, like a number we want to hit in terms of growing MRR month over month, and we look at what is our MRR now, what is the new MRR we need to add? What is the amount we're going to churn? And then we figure out like how much MRR we have to go out and find from our customer base from the world and how many customers that is. And then we make sure that all of those three channels, the amount of customers that we expect to come in adds up to that number and it's probably just three channels.
DA: 10:12
First of all, I absolutely love that. So you guys set the goals, work backwards, trying to figure out the exact numbers you need to hit and then figuring out the channels and strategies to do that. My question to you is, and this is the question I asked a lot of people because I find it so interesting, where do you get the MRR goal that you want to hit next month? Where are you guys pulling that from? Is it from leadership? Is it just a plan? Hey, we want to do 10 percent month over month growth. Where do you pull that from?
AG: 10:37
Maybe the right thing to do is that you have like a top down approach, where you look at what traditional venture backed company like high growth rates are and try to hit that at the same time, keeping it based in reality by also doing a bottom up approach at historics and all that. Early on when we were, the numbers were smaller and we were doing. I mean now we do $1.2,000,000 a month now, or $15,000,000 ARR when we were doing $50,000 a month in monthly recurring revenue, we would just grow 30 percent because it was, it seemed doable. It was a, it was on par with venture backed fast growing very, very, very early stage companies. So would be like 30 percent sounds good. Let's see if we can do that.
DA: 11:26
That makes a lot of sense. Yeah, I could see definitely how you can do that and it's always funny that like first year, first two years growth is easy because the numbers are so small and I'm sure where you guys are right now it takes some more deep thought and maybe a smaller projection because you are at such a high run rate already and you guys, first of all, congratulations. You obviously scaled up from that $10,000 a month as you said, all the way to the 15 million ARR kind of run right there. So I want to take a step back though. You mentioned before about summits, which I think is a really interesting topic, so you guys are basically running summits for lead generation and sales.
DA: 11:26
Yup, exactly.
DA: 12:01
So what do you do to set those up? How are you planning them? Are you bringing in partners, people to speak to them? What does it actually look like?
AG: 12:08
Yeah, so summits are my favorite thing. Like if I was. If I worked at Demio for instance, like that would be one of the things I would totally want to do. Because you can acquire a huge chunks of customers at the same time. Right? So we had like 70,000 paying customers and we acquired 2000 paying customers in one week. The way we do it is we basically set a target in terms of number of leads where we'll have a bunch of people sign up, go to a landing page to sign up for this online summit, and then over the next five days we will have really great educational content. For us it is, it's basically webinars where we talk about how to choose an amazing course topic, how to market your course, how to create the content, all the stuff that you would want to know and it's all free and so we might have, you know, 50,000 people sign up and maybe we'll have like 2000 people live on the broadcast.
AG: 13:06
Maybe it's maybe it's 3000 and what we'll do is we'll have one big offer and we make the offer every single day and the cart is open the entire time and the offer is too upgrade to get an annual plan for our software Teachable. And then if you do that, you're also going to get really great courses from the speakers for each day, for five, six speakers. And so there's five or six of these courses and these are legit speakers though like Pat Flynn will be a speaker, you know, it's courses that people actually want and they're directly related to the things you need to know to create an online course. And so we'll do that. We'll make that offer and at the end, maybe like two percent of registered, two and a half percent of registrants will convert into paying customers.
DA: 13:57
Wow, that's incredible. So you're planning out these summits where, where did you learn when you first started pull the numbers that you wanted to hit? How early did you have to plan for that? And also how did you get people? It's promoted when you didn't have the leverage that you probably have now for reciprocals or partners and stuff like that to promote.
AG: 14:16
So in terms of how we plan, we start like three or four months in advance and we know that all of our traffic, all the leads, you're going to come from just a couple of sources. So they're going to come from our own email list. They're going to come from affiliates and they're going to come from partners and they're going to come from paid acquisition and affiliates or just people promoting the software they keep a commission. Partners are like the speakers. And so what we'll do is we'll have a, we'll have four months of runway and that's how much it takes for people to get everything on their calendar and a lot of times we do custom promotions for our partners in advance, sorry in return. So like we have to plan those out too and that takes time. And so we'll do like blog posts and all that kind of stuff as far as how do we get those partners. You've always started by just getting like one anchor partner which has worked really well. And so it'll be like that big name and that'll just be like asking for a bunch of introductions and meeting for coffee and like whatever you have to do to get that one person and then getting everybody else based off of that one person.
DA: 15:45
That's awesome. A lot of times, do you have that from personal networking events? Like going to, obviously you said reaching out to your friends and referrals and stuff like that. But would you say that one anchor is mostly like a personal connection?
AG: 15:58
Yeah, I mean this isn't that practical so I'm hesitant to even talk about it, but like Ankur is the CEO here and he's very well connected more than anybody else on our team and so you know, he would get an introduction to somebody or know somebody and then we would use them and we would have to. It would take a lot of work. We would still have to like beg and plead and get certain folks we wanted to join to join. Other people now, like now people come to us asking to be in them, but the first one we were starting from scratch. We had never done it and we just asked a bunch of people, yes, some of our customers and many of the names weren't big name is, but they were people that we knew could deliver a ton of value to the audience and you don't need the big names. You need people that can actually make it a really valuable and people who will convert and create demand for your product.
DA: 16:51
Yeah. I think you just nailed that. That was such a valuable statement, which is the reason I asked this as a lot of people probably haven't done a summit before and looking at doing them are probably very daunting. I know myself looking at it like, oh, this is a big thing to do. How can we start without leverage? How do we get the right people, but I think you said a very smart which is you kind of sit down first, map out like what type of experts would be best to deliver the best value that also positions our software and our brand in the best light that we can go after. People that would fit that. It doesn't have to be the biggest name influencers in the world. Eventually once you have leverage and the wheels are turning could probably pay those speakers or like you said, they'll come to you eventually, but to start with just find people that can deliver value but in the right position. Is that kinda how you started?
AG: 17:39
Exactly, and the framework is really first look at your software and figure out what are the educational components that people need. What do they need help with? Figure out maybe it's five different topics, then figure out who are folks who are very able to like educate your audience on those topics. Then hopefully too they're willing to promote this summit and then you'll probably offer them something in return for your audience because you're going to have this whole big audience of people that are engaged right after your summit too. And then find, yeah, find the right person for each one of those topics. And there'll be like five or six people.
DA: 18:21
That's awesome. That's really powerful. How often do you guys do this? Like once or twice a year.
AG: 18:26
Yeah, we do them twice a year.
DA: 18:27
That's amazing. And you said before you do you say about 50,000 leads?
AG: 18:32
Well, the first one we ever did, did 8,500 leads.
DA: 18:36
Well that's so great.
AG: 18:38
But here's the thing though, we did 8,500 leads and 500,000 or maybe $450,000 in sales. But now now this year, so our last one we did, we had about 45 or 50,000 leads. This one we're doing in a month, we're going to have probably 60,000 leads, but the revenue isn't going up linearly with that. So you can do a, some, like the revenue we're going to do this year might be, I could be 700,000 or $800000. I don't know what it's going to be, but it's not linear and you can do a summit, where do you acquire hundreds or thousands of customers with 8,500 of the right people.
DA: 19:21
So the audience itself is the thing that matters most and they're going to be most attracted by the right value based speakers and educational speakers that you bring to the summit itself. And of course the partners and Jvs that are also helping to promote.
AG: 19:34
Exactly,
DA: 19:35
Yeah, that makes a ton of sense. So really for anyone listening, if you're looking at doing this, I highly recommend you do. I think we're going to be really investigating doing this as well here at Demio, but you don't have to think it has to be a gigantic summit. You can still make great money from those smaller events sizes. Any big wins that you would talk about or any specific strategies that you've seen have worked over the past few that you'd want to share with people?
AG: 20:00
I think the reality is not, the reality is that you probably need to like the real values and getting maybe like 15 or 20 things that are all on their own small, getting them all right and well coordinated. The big thing would be like, have an amazing offer like that goes so far that will make everything else easier and give you a lot of insurance on the event. If the offers is amazing people will find it. The other thing is focus on the right audience. So here's kind of like actually a failure we had with our last one. We spent, spent a good amount of money on paid acquisition and so we had 30,000 registrants in our last one come from paid ads and that was a mix of new prospects and retargeting. Most of it was prospects that have never heard of us before. That cohort of those folks that have had not heard of us, most of them did not convert well at all and so we wasted a lot of money there and what our big takeaway was that we probably could have had 20,000 registrants and gotten the same same results in terms of revenue and saved a whole bunch of money and time and so I would just really, if you're gonna do it, focus on finding the right audience and getting the right registrant and not trying to like do a huge launch where you're everywhere. Just focus on like two or three customer personas.
DA: 21:34
That's great. So you almost, it's almost like a little bit of a vanity metric if you look at just registrants because that doesn't really reflect what that conversion rate could be and you could really fill it up with the right audience. Why do you think you guys had so many? I guess cold leads, so many registrants that weren't the right fit. Was it advertising was going too wide and you went into a really wide niche of just everyone who is an entrepreneur and there was just no interest in someone creating a membership site or was it just high level of frequency of ads that may have just gone to a retargeting person who was visiting a course and they had really no interest in being an entrepreneur or anything like that?
AG: 22:11
Yeah. So I mean, I think the real reason is that we haven't figured out paid acquisition well here. Like we just have never been able to figure it out and on the marketing side. And so like that's been one of our biggest failures as a, as like a marketing team. And so that also led into our summit were like, yeah, we're spending money we were acquiring registrants for this summit within the right cpls, but they were the wrong ones. And so if we haven't figured out the right audiences to go after in our evergreen paid acquisition, then it's kind of naive to think that we would have figured out those audiences when all of a sudden now we need to spend like $15,000 a day for (inaudible) days to find these audiences and we've never had them before. So, yeah, we just don't, we haven't figured out paid acquisition, like we've really struggled with that.
DA: 23:04
It's a really tough place to be. But you know once you find how that works, especially if you dialed in an automated webinar funnel with some paid advertising, you guys will be in a powerful place. And looking forward and looking back at first of all, this amazing growth curve that you guys have had over the past four years and just how you guys have exploded on the scene. What, what do you guys see yourselves doing next? Where are you going to keep this growth curve alive?
AG: 23:28
Yeah. So I think that's probably what most of us are most excited about. So really Teachable the vision for how the company evolves is that it's going to happen in three phases and so first phase where really kind of what we're in the middle of right now is that we want to become the online course platform for people who are focused on making money. So we want to be the best at ecommerce. And so there are a lot of different course platforms out there, there are ones that are enterprisey and great for internal training or ones that are for a really great student experiences and ones that are really, really powerful and I think we have elements of all of those. But we want to become the best place that you go if you want to make the most money so we have really great checkout flows and affiliate software.
AG: 24:27
And even like things like we did save credit cards for instance. So like if somebody buys a course on Pat Flynn school now, they already have Teachable account and they can check out with your, on your school with one click, kind of like Amazon, like little small things like that. We're investing in and so that's, that's the first phase. The second phase is that we want to go beyond online courses. So there are a lot of ways that people can make money from their expertise. For instance, we have like coach Chesky, he's the head coach at Duke Key, uses Teachable for his courses, but you know, what put coach Chesky he, he has a lot of different products that he sells information products where he's making money from his knowledge and we want the other 80 percent of that business and we want it to flow through us and we want to make it seamless and we want to make it all in one and reduce friction for the instructor.
AG: 26:16
And so phase number two is going beyond online courses. And then there's phase number three. And we're still a little ways away from this and actually, you know, that's something that probably the thing I'm most excited about, but we want a, we're going to make it easy for people to, to make more money on Teachable by virtue of just choosing Teachable. And so what that looks like is, like right now there are a bunch of different course platforms, right? And you use them, they host your courses and all of that. But what if we could drive you extra customers. And so there are a few different ways that that plays out. For instance, we could. So one thing is we could have an affiliate marketplace, not like a course marketplace like Udemy where students show up and see a bunch of courses. We would, we're never going to do that. But what if we were able to connect our top course creators with publishers and people who have audiences that want to promote courses and monetize their audiences, but they're not going to create courses themselves. Another example is like, what if we could do user paid acquisition released strategically to drive traffic to some of our instructors who convert really well. Like what if you were an instructor on Teachable and there was a toggle in your school where you could flip that, toggle on and say, hey, we want to have Teachable promote us. And then Teachable can go out and through any variety of strategies, go out and drive you more sales. That's the long, long term vision.
DA: 27:00
That is such a cool vision. I really liked when you said that, I totally see that, like if you hit a certain percentage of reviews or feedback scores or just conversion percent into your course, maybe you qualify to be a, you know, Teachable approved account where you can get Teachable to be the network for you. And I think of things like, you know, Amazon's kind of like that too right when you list in Amazon, they drive traffic for you just by the nature of their, their system being so big. Plus there's like advertising on there and all that kind of stuff. So you guys could really be this, very huge membership network that people just love to use. I love that vision and I know what it's like to have, you know, a six, six months, one year, three year kind of vision lay down. You're just excited to get there. So I'm excited to see you guys kind of push through this. And it sounds like you're really have a good, a good path kind of laid out to get there. And do you see the industry itself of membership sites changing or I guess it's just going more into like ecommerce and it's becoming more of a common practice just to have the membership type of a process?
AG: 28:05
I don't know. I mean I think the space is growing really well, so like the wind is at our back and it's a really big market and it's a growing market. And one thing that just sticks out to me though is that if you look at all of our most successful instructors, like so many of them, they have all of these different formats that they're selling, all these different types of products that they're selling beyond online courses. And so I don't know how that's gonna change or what's going to be impacted, but I do think we're, yeah, Teachable at least we need to think about being there for them when they want to sell other, other formats. And I think there will be like a pretty big advantage and a pretty big (inaudible) around any company that can offer the ability to sell more than online courses and a lot of different types of information. And also like if you can help them make more money, if you can help them make a sale just by virtue of being on you. Like I think that's, that's a real shift. That's gonna, that's gonna eventually play out and become a thing that exists probably like five years out.
DA: 29:27
I love that and I commend you guys. It sounds like you guys really have dialed in on saying, Hey, listen, whatever we can do to help our teachers make more money in Teachable, that is our winning value. And for us, we felt the way with Demio like if as long as we can make the attendees have a great experience and the presenters make more money in their courses, that is what we have to focus on. And that's kind of been our, you know, mission ourselves. So it sounds like you have that same view and you're kind of seeing things change and you're looking for the value add or just your users can sell more and have it in a continuous area. I think the hardest thing is when you're selling multiple things and then trying to track who bought what, where and how. And you have all these different funnels and processes because nothing is kind of integrated together. So that makes a lot of sense. And what about marketing? Have you seen marketing teams needing to adapt to this changing marketplace?
AG: 30:20
Yeah, but I mean that's something that we struggle with all the time, like just even like internally. So I mean obviously going from those very early phases from like zero to a million dollar the business is very different than one to five, five to 10. And like that's something that we struggle with, I'm probably not the right person to give advice about that. Like it just something that we're, like it just each phase of the business you need to change your, the strategies you use, how you spend your time, how you acquire customers, all of that. And so it's for us internally, we're going through a change right now where we used to do all this event driven stuff, right? So we've done the summits, the Webinars, we've done a lot of jv partnerships and all of that. We still do those, but we're actually trying to shift away from that event driven growth model where it's like we have all these customers come in at any given time or trying to shift to more of like an evergreen ongoing model where all of our growth is percentage driven instead of a one off hit driven. Just because the law of large numbers, it becomes a lot harder.
DA: 31:43
We're actually on the exact same page. We're doing the same thing as like, yeah, you get these big spikes, but then you also don't have like the ability to systematically scale the way you want or just say again, back to advertising, Hey, I want to increase our ad budget knowing that that's also going to increase growth percentage, so without that kind of system in place, it makes it so much harder and like you said, once you have those big numbers, hitting the revenue milestones and stuff becomes so much tougher, so that makes a lot of sense. And again, I just want to say congratulations to you guys for going through the growth process. You have, you have new problems but they're good problems to have and it sounds like you're making the right decisions and auditing where you guys are making the decisions you need to move forward. So congratulations to you guys. What I want to do now though is jumped to our lightning round questions. It's just five questions that I ask real quick. I want you to just to answer with the first thought, best thought that comes to your mind. You ready to go, it's a ton of fun?
AG: 32:37
Yeah. Let's do it, man.
DA: 32:38
Let's do it. Alright. What advice would you give for early stage SaaS companies starting marketing today?
AG: 32:45
Just do a few experiments. Find one channel that'll work over and over again and then push that hard.
DA: 32:50
I love that. No, truly, truly love that. Focus is so critical early on. What skill do you think is vital for marketing teams to improve and build on today?
AG: 32:59
Probably a lot of the direct response stuff like being able to ask for a sale and get people to take out their credit card and buy something from you.
DA: 33:07
Best educational resources you recommend for learning about direct response marketing?
AG: 33:11
Make a list of the companies that are doing what you want to do that have really great marketing and then go through all of their funnels and see what their process is across the entire user journey.
DA: 33:25
Oh, I love that. That's great advice. Do you typically have a number that you try to go through?
AG: 33:29
Like a number of companies?
DA: 33:31
Yeah.
AG: 33:33
No, it's not typically that intentional. It's more so I will see something that catches my eye and then I will go down the rabbit hole and I'll end up buying stuff and see what they do like buying all their stuff like that kind of thing.
DA: 33:48
Best thing a marketer can do is pull out their credit card and go through the funnel themselves. What about a favorite tool you can't live without today?
AG: 33:55
Probably I don't know if it's a tool it's an App, Audible. Listen to so many audiobooks.
DA: 34:01
Yes. It's such a great tool. I love it. No, it's so helpful. What about a brand business or team that you admire today?
AG: 34:08
I really admire Zapier. So they're all. The product is so good. They're growing really, really fast and I'm sure they're working really hard to make that happen, but they make. They make it look like it's so easy and the product is great. They're all remote, like it's such a great business.
DA: 34:28
It's so great. I love Zapier. They're such a great example and there's a short list of great remote distributed teams that are out there that are doing great things, but they're one of them. I also think about like Basecamp and a few others that are just amazing, but great answer. Great interview Andrew. I just want to thank you again for your time today. It's truly wonderful to have you on the podcast to talk about Teachable. I love what you guys are doing. I love the vision and I would love to have you back on next year as you kind of go through this, you know, this three part vision breakdown and see where you guys get to in the next six months.
AG: 35:04
Yeah. David, thanks so much for having me on, man. This is really fun.
DA: 35:06
Alright, I will talk to you soon and thanks for your time.
DA: 35:08
Man Teachable is just an incredible company and if you haven't checked them out yet, definitely go over to Teachable.com, see what they're doing and see why their business is thriving. They're really on an amazing track. Just continue to grow and revolutionize their industry. I love hearing the vision over the next few years as they continue to conquer that space. Really incredible stuff and I want to thank Andrew and the entire Teachable team for jumping on the SaaS Breakthrough podcast. (...)
About Andrew Guttormsen:
